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All Contractors Wrestle With Having Journeymen Vs. Paying Subcontractors
When I say "Journeyman" that means someone who has a minimum of 10,000 hours combined experience in training and practice. In our trade we call bookkeepers who work for retail stores, bookkeepers. Construction bookkeepers are people with at least 10,000 hours training and practice in construction accounting and bookkeeping services.
Hiring journeymen vs. subcontractors depends on the type of construction company you own. General contractors, residential remodelers, commercial tenant improvement contractors and other contractors responsible for more than one part of a construction project are usually better off paying subcontractors than trying to hire journeymen for all phases of construction.
The exception is journeymen carpenters; because so much of any construction project involves carpentry having journeymen carpenters’ makes economic sense.
Before doing anything you need to understand the personality traits of construction workers and to give you a hint "all dogs are animals, but not all animals are dogs". To put it another way "all plumbers are construction workers but not all construction workers are plumbers."
Having been in the construction industry since the mid 1960's I have "Been There, Done That, Got The T-Shirt, The Tattoo And Sang A Song About It". The short answer it does not work unless you have a large enough company to keep all of the journeyman trade workers separated. Otherwise you will find out the hard way it is like putting feral cats in a burlap bag; it does not end well!
The fictional story below is one of the consulting tools I use to help contractors understand construction workers thinking patterns. I trust you enjoy it and learn something from it.
Construction Workers Thinking Patterns In Action
Long ago in the psychology department of a prestigious a study was done to understand the thinking patterns of three different construction professions. They chose a mechanical engineer, an architect and a plumber.
A room was constructed using concrete and steel it was exactly ten feet wide, ten feet long and ten feet high (10' x 10' x 10') with one door and no windows. In the center of the room a one piece solid steel table three feet wide, three feet long and three feet high (3' x 3' x3') was bolted to the floor.
On the table three solid titanium balls the size of tennis balls were placed in the center of the table similar to the ones shown below
The Mechanical Engineer was led into the room at told he had ten minutes to express himself using the titanium balls. When the door was opened he had placed together so they formed a triangle. Ah-ha! Mechanical engineers are primary left brain, highly organized and linear thinkers.
The Architect was led into the room at told he had ten minutes to express himself using the titanium balls. When the door was opened he balanced all three balls one on top of the other. The researchers were stunned! The architect could not only think outside the box but in fact could construct what seemed impossible. Definitely a right brain thinker with a creative mind.
The Plumber was led into the room at told he had ten minutes to express himself using the titanium balls. When the door was opened he had broken one of the balls in half, the second one was lost and never found even after an airport style pat down, the third one was found in his lunch pail and he swears he had no idea how it got there! Obviously plumbers are geniuses!
When You Become A Client - Then we can tap into our resources of knowledge and strategy banks. We use the reports hidden in your QuickBooks in order to diagnose and understand your construction business and develop plans and help you implement a path to success for you and you alone because every contractor has unique Strengths, Weaknesses, Opportunities and Threats (S.W.O.T. Analysis) that when understood can lead to a Strategic Roadmap which cannot help but make a lot of money.
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About The Author:
Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Accounting Specialist and Bill.Com Certified Guru. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and Xero accountants to the benefit of all of the construction contractors he serves across the USA. Visit http://www.fasteasyaccounting.com/randal-dehart/ to learn more.
Our Co-Founder Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve. Follow Randal on Google+